NFC Contactless payments take their first steps in Russia

Vimpelcom, a major Russian mobile operator, announced it will deploy the NFC-based contactless payment system it implemented in St. Petersburg last year within the Moscow subway. Widespread commercial launch in Moscow is scheduled for the end of the year.

While most offline and online purchases made in Russia are still paid
in cash, contactless payment experiments have been flourishing in
several Russian cities over the last two years. Last October, Megafon,
another leading operator, also launched NFC payments in the St.
Petersburg subway, in addition to using the system for loyalty programs
with several local banks and retailers.

Back in 2010, MTS, a competitor of
Vimpelcom and Megafon, introduced contactless payment in Lukoil petrol
stations in Perm, as well as in the Moscow subway. Their version of NFC
technology will be deployed in the public transportation systems of “a
range of cities across the country,” MTS announced this week.

In October of last year, MTS demonstrated a prototype of the ‘Store
of the Future’ at the RusNanotech-2011 forum in Moscow. By bringing
their phones within 10 cm, or about 4 inches, of a payment terminal,
customers could make an instant payment using their bank or mobile
account. For a charge of more than 1,000 rubles, or approx. $32, the
buyer had to enter a PIN on the terminal.

The experiment was based on SIM cards supporting PayPass, a payment
feature from MasterCard, with which MTS signed a partnership agreement
that same month.

Meanwhile, the operator’s own bank, MTS Bank, announced it will issue
a new generation of bank cards, branded as ‘MTS Dengi,’ also supporting
PayPass. In the MTS retail outlets, which will be equipped with NFC
readers, customers will be able to make contactless payments using their
bank cards or their mobile phone accounts.

Last November, the global semiconductor manufacturer NXP was reported
to be prepared to produce NFC tags in the production facilities of
Mikron, a leading Russian semiconductor manufacturer located in
Zelenograd, a city in the Moscow region.

An notable player on the Russian NFC scene, Ambiq Tech St. Petersburg, the Russian branch of the US company Ambiq Technologies, produces mobile phone add-ons for the local market. The insert allows customers to use their phone as a discount card or a payment instrument linked to their bank account.

NFC – an acronym for Near Field Communication – was created 10 years
ago. The technology has been widely discussed since Google introduced
its Google Wallet last year. Global payment companies are actively
working on projects using this technology.